"[Before the floods, clients] were looking to buy, they were wanting to understand their position. A lot of people were wanting to be pre-assessed; just that initial discussion to confirm what their position might be. People were looking for pre-approvals because there was a lot of push from agents to be in a position that we never saw in Queensland where they actually wanted them to go unconditional on contracts, which was just crazy. Agents were looking for large deposits as a confirmation that people were in a position to buy.

"So there was a lot of pressure there for people and that just disappeared. I think we were seeing a little bit of a downturn before that anyway."

Insurance and valuation concerns mounting

Meena Bebawy from Yellow Brick Road Stafford said he believed there would be "a lot of insurance concerns".

"I’m sure the insurance companies will respond with some form of levy or increase in premiums or maybe not even being able to insure at all," he said.

"It occurred with bushfires, where risk ratings have been commented on in valuations. I think we’ll see the exact same thing occur with flood risk ratings appearing in valuation reports. So that’s not a good thing; there could be risk ratings that are untenable for lenders to continue on and then you’ve got lender mortgage insurance providers that will rely on those reports and then may not insure the application, etc.

"I think that there’ll be a lot of issues still to arise but no doubt, we’ll see some commentary in valuations and that will be more concerning as those valuations start rocking up."

A rise in defaults

According to Zain Peart from Zep Finance "defaults will absolutely increase".

"Even at the moment, there’s a minimum six months before people will be able to live in a house that’s hardly had anything wrong with it.

"All of West Ballina, water might have only gone in half a metre, but you still have to rip up everything…it trips the power board... you got to rip out the walls...  you’ve got to replace everything...  just that little damage is a minimum six months to get back.

"The clean-up for that was crazy, but you go to Lismore and other towns and it’s gone up the first level of the second level [of the properties]. It’s wild. The return to being able to live there will [take] a long time.

"[And] there [are building] delays... the two main truss plants in the whole region have been wiped out… There was already a shortage of materials [and] a shortage of builders.

"I had one client call up and was pretty much crying, saying: “I’m never going back to my house again”. She’s hoping that she’ll get the insurance payout and maybe enough to clear the loan and will just leave it and [won’t] go back. It’s pretty horrible," he said. 

Prices might bounce back

However, Nerida Conisbee from Ray White was more optimistic, saying: "What’s hard to unpick is the flooding impact on value and what is happening in the market that is making this area more desirable or more expensive. If you have a look at Brisbane, 12 months post-2011 floods, the areas that were badly impacted did see a drop in values. But, the values of those properties did bounce back pretty quickly and most of those areas have gone on to achieve incredibly strong price growth because they’re on the river and living on the river in Brisbane is highly sought after.

"We similarly saw it in Mallacoota in the Victoria bushfires. On one hand, a severely damaged home [might have] completely burned down but the homes got rebuilt under Better Homes and then what we then saw was the regional migration boom because of COVID. So, Mallacoota pricing jumped around 70 per cent over 12 months.

"People love living in dangerous areas because they’re very attractive places to live. That often can be a far greater driver of price growth than the initial natural disaster that took place."